MANILA, Philippines — Power utility giant Manila Electric Co. has been cleared to contract 50 megawatts (MW) of solar supply from Solar Philippines Tanauan Corp. (SPTC).
The Energy Regulatory Commission (ERC) has granted interim relief to implement the power supply agreement (PSA) between Meralco and Solar Philippines.
The agreement calls for a 50 MW supply from SPTC – 25 MW from its solar farm in Tanauan, Batangas and another 25 MW from its plant in Naic, Cavite.
The contracted supply will be offered at a price of P5.39 per kilowatt-hour (kwh) for a period of 20 years, which the ERC said is “not subject to adjustment or escalation.”
Meralco and SPTC have sought approval of the PSA in February 2017, after the companies signed the deal since there were no price challengers in the solar developer’s offer.
Both parties have asked the ERC to urgently resolve the PSA application given the need for the supply.
The agreement was entered into since Meralco saw the need to source additional peaking capacity to ensure stable, reliable and affordable power supply to consumers.
Meralco foresees a peaking capacity deficit in power, particularly in the summer months due to high demand and possible outages.
In granting interim relief, ERC benchmarked SPTC’s P5.39 per kwh offer to comparable contracts involving solar power plants.
Compared with the P8.75 per kwh rate from Kirahon Solar Energy Corp., P8.54 per kwh rate from Astronergy, P8.50 per kwh from Liberty Solar Energy Corp. and Kirahon Two Energy Corp., SPTC’s proposed rate is the lowest among the previously approved PSAs.
The PSA is also expected to result in a reduction of Meralco’s generation charge by about P0.0118 per kwh.
Meralco’s PSA with SPTC is the first to be cleared by the ERC.
The power distributor also filed a PSA with PowerSource First Bulacan Solar Inc. at P4.69 per kwh and another one also with SPTC, covering an 85-MW supply at P2.9999 per kwh.
It is looking at another another 50-MW solar power contract from Pilipinas Newton Energy Corp. at a rate of P2.98 per kwh, subject to the competitive selection process.